Chapter 93: Hidden Risk: Socio-Economic Theory and Crises

Hidden risk involves potential threats to organizations that are neglected or tacitly accepted. These risks create hidden costs unaddressed in formal accounting reports and information systems. They undermine revenue, impede organizational performance, and engender crises. SEAM processes can recover some these costs. But when unaddressed, the costs can accumulate and evolve into crises. The current chapter addresses the nature of hidden risk, how it emerges in organizations, how hidden costs produce dysfunctions that make society more risk-prone, and how SEAM’s six new management tools, along with Ethnostatistics, can help manage hidden risks and prevent organizational crises.